The problem with these comparisons is often that the old OS doesn't actually do the same thing modern software does. Smoothly rendering a GIF/mp4/webm in a chat channel will bring that Windows 98 machine to its knees. Even complex software like web browsers on these older machines do a lot less work. They were also often a lot slower, as load times for modern SSDs are closer to old RAM than to the hard drives at the time.

I can imagine that your particular workload doesn't require all those bells and whistles, and I think it's probably true that only running the bare minimum software like you would back in the day is horrifically inefficient on modern operating systems. But, at the same time, kernels don't crash as often, disks encryption is actually a thing now, file downloads are no longer expressed in kilobits per second and the much prettier screens render much smoother media for a fraction of the performance impact.

Of course there are inefficiencies that could be fixed (like how chat apps are skins around browsers now) but a lot of efficient software from back in the day cost an arm and a leg to build. In the end, the software industry found out that customers are happier to pay when you deliver new features faster than when you deliver new features later (which still run on the old hardware, though the customer may have already replaced said hardware at the time you release your feature).

With current prices for RAM and other system components, I hope companies will once again feel the pressure to build for limited hardware. Then again, when I look at the hardware developers are lugging around, I highly doubt things will change quick enough.

I believe Win9x (and the rest of the DOS-based Windows) has lower input latency than the NT-based ones, largely due to a simpler architecture with shorter codepaths.

Here's a related article: https://news.ycombinator.com/item?id=16001407